Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.
Caterpillar sent a shock wave through Wall Street last week with its announcement that it will not top its first quarter profits for the balance of this year. Cat told stock analysts that it does not expect a larger per share profit for the rest of 2018. Other industrial companies also took sharp losses in the past week. Caterpillar products are used in a wide variety of industries ranging from construction to power generation, mining and oil and gas exploration. All of this came after Caterpillar announced a strong first quarter results and raised its forecast for the year. Bloomberg analysts say bets that the corporate tax overhaul would bring bigger profits and greater growth simply hasn’t happened yet.
It is apparently dead for this year. That’s what lawmakers are talking about for a Trump infrastructure deal from the Congress. Reading the tea leaves from various congressional sources indicates that the political focus for 2018 will be on mid-term elections and not meaningful ways to spend $200 billion on the nation's infrastructure. So planning, political will and the dollars needed to fund the effort are all in short supply.
The U.S. Commerce Department is reporting that while nationwide housing starts increased in March, single-family home construction retreated. Total housing starts gained 1.9% for the month to a seasonally adjusted rate of 1.319 million. Despite the dip in single-family starts, Wells Fargo says data for the first quarter of 2018 are unambiguously positive and revisions to February numbers indicate that new home construction has more momentum than previously indicated. Meanwhile, the Architecture Billings Index notched its sixth consecutive monthly gain closing March at 51. Although the pace of growth was slowed from February, the AIA claims that new project activity continues to grow at a solid pace.
The Portland Cement Association spring forecast envisions modest growth for cement consumption and is calling for a 2.8% increase for this year and 2019. The market intelligence report from PCA sees cement consumption rising to 4% in 2020 as positive effects from infrastructure spending will apparently come due in the fourth quarter of 2019.
The Federal Highway Administration has issued a final distribution notice to states for its federal program funds under the FAST Act for this fiscal year. State transportation agencies now have the full notice of limitations for money they can obligate to projects through September 30th. The FHWA action follows the March enactment of the omnibus spending bill to spend some $44 billion on roads and bridges. This federal action comes earlier than 2017 when federal road funding occurred in late May, and the total amount was much lower.
Four point six billion is the dollar amount Illinois needs each and every year to keep its roads, bridges and transit systems in good repair. That from the state Economic Policy Institute. Analysists claim over 35% is needed for roads and 64% for bridges by 2023 of state funding to continue to provide decent travel conditions. The report also states the backlog of road repairs has increased by 85% since 2000, and the pay fors are extensive. Analysts also claim that fuel taxes will need to be hiked 350% to cover the shortfall.
The costs just keep on climbing and as a result the federal government is set to audit the California bullet train project. Because the Federal Department of Transportation has already committed $3.5 billion in grants to the endeavor the inspector generals division of the Federal Rail Administration will have a look at where the funds are to be spent. The controversial bullet train idea to speed passengers between San Francisco and Los Angeles in three hours time.
Up, up in the sky it's a Komatsu drone. The company has placed an order for 1,000 of the devices from manufacturer DJI Incorporated. The drones are to be placed into Komatsu’s new data service operation which lets new robotic earthmoving equipment dig, bulldoze and grade jobsite land autonomously. Komatsu is immersing itself in technology of this type, and the 1,000 drones will be the start of its new data operation.
We haven’t ignored the story, it’s just taken time to acquire 95% of the land needed for the new Gordie Howe Bridge connecting Detroit with Windsor, Ontario, Canada. Thus far, 636 land parcels have been purchased by the Michigan Department of Transportation leading to 229 residential and 88 business relocations. Crews have demolished 235 structures thus far; $350 million dollars worth of prep work is underway in Michigan and Canada for the bridgework itself to begin this year on the $2.1 billion project.
Finally, we leave you with this: to steal ideas from person is plagiarism; to steal from many is research.
This is Construction News Tracker looking over the industry that makes the world a better place, presented by Caterpillar and produced by ForConstructionPros.com.